VESSEL REGISTRATION

Vessel Registration
Name
Institution
Date
According to the United Nations Convention on the Law of the Sea (“UNCLOGS”), it is mandatory that all vessels should bear a flag for identification (Nordquist et al., 2011). Ship-owners have two main options when choosing the flag state for their respective ships, either open or traditional regimen. There are various factors that ship-owners consider before selecting an open flag registry.
Kavussanos & Tsekrekos 2011 indicated that it is essential the ship-owner meets all the registration requirements and can pay the registration fee. In the registration requirements, the nationality of the operator, the owner and the rest of the crew are not restricted, meaning citizens from any other country can register their ship in the home country. Also, the ship-owner should assess the taxation terms. Some flag states like the Republic of Marshall Islands exempt ship-owners from paying taxes such as annual filings, asset tax and net income tax. Besides, there are safety requirements and qualification of crew members, certificates such as Special Qualification Certificate which is issued after assessing the crewmembers (Kavussanos & Tsekrekos 2011). Other factors that need to be examined are the operating costs, labour, international treatment, and ship mortagage.
Flagging a vessel in a country where the owner resides attracts various benefits. Yang & Chung 2013 identified taxation incentive as one of the financial benefits.

There is no double-taxation since the seaman pays tax only to the home country. Also, the owner of the vessel can get cheaper labour and oversee the operations of the ship. Additionally, the ship-owner can get direct financial assistance from financial institutions when in financial crises. Furthermore, the vessel-owner can quickly obtain an export insurance covers as compared to foreigners.
A vessel owner can do bareboat registration and grand the respective vessel a dual flagging (Yang & Chung 2013). After registration, the bareboat charterer will require the ship to fly another flag when in a specified area of jurisdiction.
References
Kavussanos, M., & Tsekrekos, A. E. (2011). The option to change the flag of a vessel. International Handbook of Maritime Economics, Edward Elgar Publishing, Cheltenham, 47-62.
Nordquist, M., & Nandan, S. N. (Eds.). (2011). United Nations Convention on the law of the sea 1982, Volume VII: a commentary (Vol. 7). Martinus Nijhoff Publishers.
Yang, S. H., & Chung, C. C. (2013). Direct shipping across the Taiwan Strait: flag selections and policy issues. Maritime Policy & Management, 40(6), 534-558.